A Client Has Asked You to Review and Correct the Following

question 51

Essay

A client has asked you to review and correct the following income statement.
Additional information:
a.A $5,500 machine tune-up was recorded as an asset.
b.The costs of buying a $90,000 piece of equipment on the last day of the fiscal year were treated as equipment expense.
c.An asset with a cost of $230,000,an estimated useful life of ten years,and a $20,000 salvage value was depreciated $23,000 for the full year.
d.The power and electricity costs of running a machine were treated as an asset for the year.The costs amounted to $16,000.
e.The $10,000 costs of installing the factory equipment in part b were treated as part of Rent expense.
Required:
1.List as many errors as you can find.
2.Prepare a correct income statement.

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Definitions:

Blended Family

A family unit composed of partners and their children from current and previous relationships.

Mixed Generation

The coexistence of individuals from different age groups within a specific context, promoting diversity and interaction.

Mixed Generation Family

A family structure that includes members from multiple generations living together or in close contact, such as grandparents, parents, and children.

Child Rearing

The process of supporting and promoting the emotional, physical, social, and intellectual development of a child from infancy to adulthood.